House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Second Report

Attitudes to secondary selling

23. The clear message from the promoters who gave evidence to the inquiry was that, while there was no objection to face value resale of tickets for most events, reselling for profit amounted to "parasitic opportunism" by "unscrupulous" third parties.[88] They said that it was wrong in principle for those who had put nothing into the organisation of sport and entertainment events to take profits from them and that, in doing so, they undermined the ticketing policies of the organisers.[89] The Society of Ticket Agents and Retailers said that although much is made of the point that the secondary market is important in making tickets available to those who missed out when an event went on sale, that overlooked the fact that many of the tickets had been bought with the sole purpose of feeding them to the secondary market: it does not sell more tickets, it simply sells the same tickets twice with no additional return for the event organiser or those directly involved.[90] The Music Managers Forum told us that if the current situation continued unabated, the Forum would continue to investigate ways for its performers to participate in "this additional revenue stream":[91]we refer later in this Report to the progress which the Forum has been making.[92] Ticketmaster said that if the activities of the unauthorised market continued unchecked, it could only be a matter of time before its clients want to capture the value of the secondary market and channel it back to their industry; managers might therefore seek to maximise profits during the "shelf life" of a particular band, but the model was not sustainable for the industry in the long term.[93] Mr Rob Ballantine (Chairman of the Concert Promoters' Association) anticipated that this might lead to an "economic explosion" to the detriment of the public if entrepreneurs lost patience with profits being taken by a secondary market and responded by choosing to maximise their own profits.[94]

24. Witnesses from both the primary and secondary markets described ways in which primary sources were now moving in that direction, with auction selling in the primary market already rife in the American music industry (in response to vast increases in the amount being paid for tickets as a result of higher booking fees as well as the rise in secondary selling),[95] and showing signs of growth in the UK. Ticketmaster told us that a "small percentage of tickets" were being sold in this way, while eBay said that there were "numerous examples" of event promoters in the primary market auctioning off tickets, sometimes eight to ten rows at a time.[96] viagogo suggested that performers and promoters had "embraced the re-sale market and its positive impact by launching and endorsing re-sale services of their own", referring to a number of performers, and sports and music venues who had signed up to resale services provided by Ticketmaster in the US.[97] Ticketmaster told us that, to date, its UK clients who had adopted its TicketExchange resale service had opted for the model which allowed only face value resales. Mr Ballantine told us that rising ticket prices had led to a decline in the American live concert market, which indirectly affected the British live music scene because both American artistes and the companies involved in the American secondary market were looking to make up the resulting loss of profitability out of events in this country.[98] Only two days after we took oral evidence, the Times newspaper reported that some of the most enduring names in popular music were suffering a backlash elsewhere in Europe from fans refusing to pay inflated prices for live concerts, with artistes such as the Rolling Stones and Barbra Streisand playing before "tracts of empty seats" in European venues.[99]

25. Consumer attitudes are less clear cut. Indeed, the evidence showed that the public seemed to have an ambivalent and contradictory view of touting.[100] The Government said that, based on the research available, consumers' views seemed to point in two directions, in that consumers did want a legitimate and unregulated secondary market where they were able to buy and sell to one another but, at the same time, some consumers did not want the markets to be exploited by touts, and considered that legislation was needed to prevent resale of tickets for profit. The Rt. Hon. Shaun Woodward, then Minister for Creative Industries and Tourism at DCMS, told us that consumers saw nothing wrong in selling their tickets above face value, but that they thought that an organised, unauthorised secondary market was unfair.[101] He also commented that he had "not yet seen any evidence from consumers", who were, after all, he said, the group which should be protected.[102] We too found that very few individual consumers submitted evidence to this inquiry, and the attitudes of those who did ranged between enthusiastic participation and hearty disapproval.[103]

26. Although sports bodies told us that the secondary market was preventing genuine fans from attending fixtures, it did not provide the evidence on which that statement was based. While witnesses said that a proportion of tickets was made available to target groups, it was not explained how those allocations found their way onto the secondary market. If it is correct that a significant proportion of those allocations is diverted, that suggests that the allocation procedures are not working properly or that many members of the target groups are choosing to make a profit on their tickets rather than attend events.

27. Much stress was laid in the organisers' evidence on the apparent plight of "genuine" or "real" fans being unable to attend events because the only tickets available were those on the secondary market at inflated prices, with an implication that there was something insincere or artificial about the fans who were able to attend because their pockets were deep enough.[104] Indeed, the media have reported that the organiser of the Glastonbury Festival intends to relax the strict anti-touting measures put in place for 2007 because the audience had been "too middle-aged", with fewer teenagers, "the kids who make it work", attending.[105]

28. A number of opinion polls have been conducted, in addition to the study carried out by the OFT and the qualitative research commissioned by DCMS.[106] These do not present a coherent picture. We were referred to polls conducted by the New Musical Express at various times, where 84% of readers had said that tickets were just like any other property which they should be able to sell,[107] 67% had not believed that selling tickets by online auction was acceptable,[108] and 70% had "voted for a complete ban on ticket touting".[109] eBay told us that in 2006 it had commissioned a survey of 1000 people,[110] of whom 87% believed that they should be allowed to resell tickets they could no longer use, 66% believed that individuals selling spare tickets was "not the same as ticket touting" and 54% believed that the price of a ticket should be determined by what people were willing to pay for it—which would seem to imply that nearly half thought otherwise. Polls conducted by viagogo have reported that 70% of people agree that "it's their right to pay whatever they consider is an appropriate price for a ticket, even if it's above face value", and 67% say that "that they want to make a profit if they re-sell tickets". The results of a survey of 2,352 individuals representative of the UK adult population, conducted in March 2007 by YouGov for the England & Wales Cricket Board showed that 58% viewed ticket touts and internet auctions unfavourably, 6% favourably, and that 76% agreed there should be greater regulation to tackle ticket touting, with 13% neutral and 7% disagreeing.[111]

29. The view from providers of trading platforms allowing sale of tickets at a profit on the secondary market was that the market was a legitimate and lawful industry which operated on free market principles to the benefit of consumers, and was valued by them.[112] There was recognition that "bad apples" operating fraudulent practices had tainted the image of the market, but witnesses maintained that reselling, or facilitating the resale of tickets, at whatever price they would fetch, was legitimate and desirable even if unauthorised and in breach of terms and conditions restricting transfer.[113] They regarded attempts to restrict transfer or resale of tickets—whether by the imposition of terms and conditions or by regulation—as unwarranted interference with a fundamental right to buy and sell commodities in an open marketplace.[114] Their view was that the primary market stakeholders' demands for regulation were largely driven by attempts of events organisers and ticket agents to protect their own commercial interests, not by any concern for the interests of the consumer.[115]

30. The surveys of consumer opinion which have so far been carried out do little more than confirm that consumer attitudes are mixed. One element which is missing is whether consumers would give the same answers if they had been informed of the concerns expressed by organisers about the possible long term effects of touting on the industry. Further research would be helpful.

31. We accept that the organisers' desire for the secondary market to be curbed is largely motivated by concern for the long term well-being of the industries in which they operate, and that this is something beyond merely protecting their own commercial interests which, in the short term, they could do simply by raising their prices, so that there was no profit to be made by touting.

Whether tickets should be regarded as commodities

32. Whether tickets are commodities like other goods or services is an issue on which stakeholders took diametrically opposing views and which goes to the heart of the current debate.[116]

33. Research undertaken by Campbell Keegan Ltd for DCMS found that tickets "feel like property" to the vast majority of consumers, and that they are not viewed as "contracts" or "licences" but as real, owned, and as such "transferable'".[117] The Royal Horticultural Society referred to "a difference of opinion on what a ticket is; is it an item of property and therefore the 'owner' has the right to sell the item at whatever cost, or is it a contract to attend an event .[118] Some witnesses suggested that tickets were commodities analogous to consumer goods such as books or motor vehicles,[119] or houses,[120] where the seller does not "retain a degree of ownership" and it would be inappropriate for the seller to impose conditions dictating what the buyer could do with his property after the sale.[121] The other view was that a ticket had no intrinsic value in itself, and was merely a representation of the contract between the event organiser and the customer, granting the customer entry to the event, subject to its terms and conditions.[122] Several witnesses said that event organisers were issuing licences to enter private land and that it was appropriate for them to regulate who should enter.[123] Mr Nicholas Bitel, a solicitor representing the All England Lawn Tennis Club, offered the example of tickets issued to wheelchair users being touted to the general market, as being an inappropriate use of the free market.[124] He also, when asked to identify existing examples of secondary market regulation, referred to regulation of London Underground tickets that it was a criminal offence to sell on.

34. Another distinguishing feature pressed by promoters was their non-commercial motivation for selling tickets below the clearing price.[125] The only response we heard to this point from the secondary market was that "people should be allowed to sell their own property"[126] and that once fans had spent "their hard-earned money" purchasing tickets, the tickets should be theirs to do with as they wish.[127] Some, but not all, providers regarded free events as exceptional, since ticketholders had paid nothing for their tickets, so the "principle of property ownership does not apply" and the event organiser should be able to limit resale.[128]

35. As mentioned, there has been particular public criticism of the selling of tickets which were issued free, for charitable events; and we have no hesitation in condemning this practice. However, in principle, we see no difference between the selling on of tickets which have been provided free (whether to a wholly free event or as a complimentary ticket) and the selling on for profit of tickets which have been priced low to enable particular groups to attend, or which have been allocated to particular groups such as wheelchair users. In both cases the resale undermines the objectives of the organisers who, in both cases, have intentionally supplied the consumer with something worth more than any money which has been paid. However, the onus is on promoters to ensure that such tickets can be distinguished so that sellers, buyers and exchangers are aware of the basis on which they were originally available.

88 Mr Harvey Goldsmith Q 31,Society of Ticket Agents and Retailers Ev 35, Rugby Football Union Ev 2 Back

89 Qq 41, 42, Concert Promoters Association Ev 19, All England Lawn Tennis Club Ev 8, 9 Ticketmaster Ev 29, Music Managers Forum Ev 103 Back

90 Ev 36 Back

91 Ev 104 Back

92 See para 82 Back

93 Ticketmaster Ev 31, Mr Ballantine Qq 41, 42 Back

94 Q 37 Back

95 Mr Rob Ballantine Q 41 Back

96 Ev 44 Back

97 Ev 50 Back

98 Ev 127 Back

99 "Megastars play to empty seats after fans baulk at ticket prices", 28 June 2007, Timesonline Back